NZDUSD: upward correction is developing
During the Asian trading session the currency pair NZDUSD reflects the contradictory sentiment, being at the price level of 0.6180, remaining attractive for buying from the previous week, where quotes retreated from the low of March 10 due to the corrective momentum in the U.S. dollar.
Positive New Zealand macroeconomic backdrop contributes to the instrument's support. For example, April consumer confidence from ANZ Banking Group of Australia and New Zealand rose to 79.3 points from 77.7 points, beating most analyst expectations. Meanwhile, the manufacturing sector declined activity in the same period to 49.2 points from 51.9 points, contrary to estimates of a decline to only 51.4 points. Statistics from the PRC also had a positive impact on the instrument, as business activity for April in the service sector fell to 56.4 points from 58.2 points, beating sharper market forecasts of a decline to 50.4 points.
- Resistance levels: 0.6200, 0.6250, 0.6288, 0.6350.
- Support levels: 0.6155, 0.6100, 0.6050, 0.6000.
USDJPY: Japanese regulator announced a monetary parameter test
According to a source from the trading floors, the currency instrument USDJPY reflects a moderate strengthening, being in a confident bulls momentum from the end of the previous week. The pair reached 136.85, marking a new high of March 10.
The US currency is getting support from the expectations of the Fed to correct its monetary parameters following the announced meeting on May 2-3. The overwhelming majority of experts agree in assessments about the increase in the cost of borrowing by 0.25%, which will be followed by a wait-and-see attitude of the agency, completing the current cycle of interest rate increases.
In turn, the pressure on the Japanese currency increased at the end of the previous week amid the release of the final minutes of the meetings of the Japanese financial authorities. According to preliminary forecasts, the BoJ left the interest rate at negative -0.1%, with little change to its short-term guidance, abandoning its commitment to continue interest rate support at the current and/or lower levels. Also, the agency raised its own forecast for national inflation. Officials now expect consumer prices to reach 1.8% for the current fiscal year and 2.0% in 2024-2025, but may reduce the growth rate to 1.6% in 2025-2026.
- Resistance levels: 137.50, 138.50, 139.58, 140.79.
- Support levels: 136.50, 135.57, 134.50, 133.61.
USDCHF: Swiss regulators might tighten control over the banking sector
During Asian trading session USDCHF asset developed a contradictory sentiment, being in the area of 0.8945, as investors retained fears on further prospect of a new banking crisis on a global scale.
Wishing to pacify panic moods in the markets, the National bank of Switzerland supported toughening of control supervision, and also for legislative obligation for credit institutions to have the minimum amount of assets, capable to cover need in liquidity in case of unforeseen circumstances. The publications confirmed the lack of stability in the retail trade sector: the March statistics showed a 1.9% year-on-year decline in real turnover, with the monthly change showing a -0.1% correction. Against the backdrop of the negative trend, Switzerland's leading economic indicators fell from 99.2 points to 96.4 points, reinforcing the negative trend for the franc.
- Resistance levels: 0.9000 and 0.9160.
- Support levels: 0.8880, 0.8720.
AUDUSD: bears gain advantage before RBA meeting
AUDUSD trades around 0.6636, ahead of the meeting of the Australian regulator, announced for Tuesday, May 2.
Experts expect the interest rate to remain at 3.60%, which will allow assessing the effectiveness of cumulative measures taken earlier to stabilize consumer inflation. Contrary to the positive trend and the correction to 1.4% from 1.9% on the quarterly basis and to 7.0% from 7.8% over the year, the inflation rate is not going down as fast as was expected by the expert community. Against this background the RBA statement about keeping the key rate at the previous level will give a negative signal to investors and will stimulate the pressure on the Australian dollar to 0.6570 or lower, to 0.6480. In its turn the National Manufacturing PMI for Q1 was released on Friday showing the index growth to 1.0% from 0.7% beating market expectations of 0.8% but the annual rate was down to 5.2% from 5.8% negatively affecting the Aussie dollar.
- Resistance levels are at 0.6660, 0.6780 and 0.6905.
- Support levels: 0.6570, 0.6480.